SRIRAM MILLS Vs. UNION OF INDIA

JUDGEMENT

(1.) These seven writ petitions and Criminal Petition are disposed of by a common judgment as the issue involved are common and interconnected.

(2.) The facts in brief in W.P.No. 23103 of 1996 are that the petitioner is aproprietary concern engaged in the business of textiles. It is registered with the Deputy Director General of Foreign Trade, Government of India, Ministry of Commerce as an export house and was assigned Export Code No. 0991015823. Its principal office is at Hyderabad and branch office at Bomay. The Government of India formulated policy governing exports and imports from and to India respectively from 1-4-92 to 31 -3-1997 under the Act. Under Chapter VII of the Export and Import policy duty exemption scheme is provided and under the said scheme a person can import raw material duty free for the purpose of manufacture and exporting the same on value addition. An advance licence is granted which is a value based or quantity based licence. Under this scheme an advance licence is granted for the import of inputs/ raw materials without payment of basic customs duty. Such import shall be subject to fulfilment of time bound export obligation and value addition as may be specified in the licence and in accordance with the policy and procedure.

(3.) The petitioner made an application to the respondents for grant ofadvance licence for import of 231 metric tonnes of Polyster Filament Yarn (PFY)/ Partial Oriented Yarn (POY) and the value of which was 4,18,318.75 US $ as on 13-12-1993. The licence was granted by the respondent No. 4 on 29-12-1993. Under the scheme there is an obligation to export value added finished goods and the licence is granted subject to the exemption of customs duty on the value of the goods to be exported. The petitioner therefore has to export goods worth 6,09,000 US $. Since the petitioner had an export order for finished goods he applied for an advance licence. The petitioner accordingly imported 197.409 metric tonnes of PFY/POY out of the licenced quantity of 231 metric tonnes on various dates during the period from 14- 1-1994 to 31-3-1994. Due to suden fall in prices of the finished goods in the international market the party who had agreed to purchase the exported fabric went back on its commitment. Therefore it became impossible for reasons beyond the control of the petitioner to export the finished product. However, since the export and import policy licence is transferable the petitioner initially tried to identify some party who had already exported finished goods and would be willing to purchase import and export licence since the raw material imported by the petitioner No. 1 being a petroleum produce loses its strength with the passing of time. If the said raw material is not texturised and weaved it loses its intrinsic properties 'and becomes disfunctional. Therefore, the petitioner was constrained to search for purchasers who had export orders who could use raw material within the country. Keeping the same in view he applied on 25-4-94 to respondent No. 4 for permission to sell it to an import licence holder or to nominate somebody to whom the raw material could be surrendered as contemplated under the policy. Till 20-6-95 the petitioner has not received any reply. Since there was no response from the authorities the petitioner having waited for fourteen months identified a party who was holding a transferable licence who is eligible to import raw material without payment of customs duty without any corresponding obligation to export under para 127 of the Hand Book of Procedures. The petitioner surrendered the raw material to M/s. Abhinandana Exports who had become the holder in due course of the transferable licence of M/s. R.K. Exports. The quantity of the material that could be imported under the transferable licence holder by M/s. Abhinandan Exports 239.75 metric tonnes whereas the first petitioner had imported only 109 metric tonnes of valued at 3,86,406 US under its advance licence and the same was surrendered to M/s. Abhinandana Exports on 20-6-95 with intimation to the Government. On account of the surrender there is no loss of foreign exchange as M/s. Abhinandana Exports could have imported 238.75 metric tonnes of POY and PFY valued at 4,88,345 US $ without any corresponding obligation to export value added finished product. The fact of surrender to M/s. Abhinandana Exports on 20-6-93 was intimated to the respondents.